ADP: Private sector only added 13K jobs in June

posted at 10:55 am on June 30, 2010 by Ed Morrissey

The monthly ADP report on private-sector employment gives analysts a big indicator on the next Department of Labor report on employment — and if so, batten down the hatches. The payroll-data giant estimates a growth of only 13,000 jobs in the private sector, down from last month’s 57K and far below expectations:

Payrolls processor ADP said Wednesday that hiring by private companies climbed slightly in June, with a paltry 13,000 jobs added during the month, compared with a revised gain of 57,000 jobs in May.

The amount was lower than expected. A survey of economists surveyed by Reuters for the ADP EmployerServices report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 60,000 private-sector jobs in June.

The report, released at 8:15 a.m. ET, is often seen as a precursor to the Labor Department’s big monthly jobs report, which is due out Friday morning. ADP’s data only includes jobs created by private companies so it can vary widely from the Labor Department data, which also includes government jobs.

Friday’s report is expected to show employers cut a total of 110,000 jobs in June. However, the net loss of jobs is tied primarily to the government laying off temporary workers that were hired to work on the 2010 census.

The numbers fall short of even May’s disappointing figures, when the DoL survey showed an expansion of 431,000 jobs — but only 41,000 of them in the private sector. This shows that whatever momentum the Obama administration had in improving the jobless rate has dissipated. It appears certain that the number on Friday will go negative, with a net loss of jobs probably into six figures.

This should surprise no one. The numbers of initial jobless claims has remained constant all year long (the next report will come tomorrow), which indicates a stagnant job creation environment. In the last two years, we have only had one month of private-sector job growth above population expansion, in March, which underscores the difficulty in catching back up to the near-full employment the US had before the current recession and recovery.

But is this a recovery at all? CNN Money editor Paul LaMonica argues that it’s a barbecue recovery — low and slow:

But first and foremost, continued signs of sluggish job growth and weak demand for housing in the U.S. show that the rebound from the Great Recession is not going to be sharp and fast like a letter V.

It will more likely be, as I like to refer to it, the barbecue recovery. Low and slow. The low refers to subpar rates of growth and the slow indicates that a recovery is probably going to unfold over a long period of time.

Should we really be surprised though? It definitely seemed before the markets started to tank in May on fears about Europe that the run-up in stocks from March 2009 was a little excessive. Investors were starting to believe this fantasy, that it would take only a year or so to fully recover from the Great Recession.

LaMonica argues that the fantasy was unsustainable because of the years that went into feeding the credit and housing bubble and in the stock markets. However, that’s not the real problem with the recovery. The real problem is the future, not the past, and investors fear the future. They see a government gorging on debt and spending, and that high taxes and capital seizure is the most likely endgame for it. Instead of pro-growth policies, the agenda in Washington intends on government encroachment on the private sector.

Maybe we should call it the bruschetta recovery, because right now it looks as though we’re toast.

Who anointed this the “Great Recession”? Seems like an excuse, and a media-driven parallel to FDR. Wouldn’t it be more accurate to call it the Progressive Recession? The irony in that name seems to be more in line with the enigma that is Keynesian economic policy.

Can’t wait to see Barry go out there Friday and say with a straight face the good news about the positive job growth in the private sector. And you know even though I’m being facetious that this is exactly what he’s going to do.

..uh oh. When this crap sandwich is served up, The Pantload’s numbers are gonna tank.

Custard, smart-ass?

The War Planner on June 30, 2010 at 11:01 AM

I disagree with your guess about why the weekend numbers go up.

Remember that Rass numbers have about a 2-3 day lag. So what we have here are welfare libs who crash from their crack binge on Monday, and they only recover enough to answer the phone by Wed-Thurs. Then it’s binge time again on Friday.

Remember that Rass numbers have about a 2-3 day lag. So what we have here are welfare libs who crash from their crack binge on Monday, and they only recover enough to answer the phone by Wed-Thurs. Then it’s binge time again on Friday.

Daggett on June 30, 2010 at 11:13 AM

That 49% Rasmussen figure was a fluke just as I suspected. He basically got a huge boost from the Sunday number. The guy’s pretty much hovering around 45% right now when you average all the polls.

Which is not horrible necessarily, but his real dilemma is that it’s hard to see how it climbs back up with the prospect of a double-dip recession and massive tax increases on the horizon.

Gonna be a poopy summer for all the new college grads.
Johnnyreb on June 30, 2010 at 11:05 AM

There’s at least one who is smiling, or sort of smiling; son of a good friend is a brand new employee of mine. He has a shiny, fresh degree in something useless and will now spend his days lugging metal scrap around, sweeping, filling sand blaster tanks, working a forklift and running to the deli for my lunch.

But hey, he will learn some useful trades because I make sure all my guys have the chance to get their hands in the shops workings, and it beats manning the window at BK.

Who are these 45%? They’re the reason we have velcro shoe closures now and warning labels on hot beverages. And they can vote.

Monica on June 30, 2010 at 11:21 AM

70-80% of Dems still support him. Along with a small percentage of independents and a couple of Republicans(I believe they’re both journalists named David).

And to be frank, he’d have to try(and he certainly is) to get below 60% favorability amongst Democrats. They’re too ideologically rigid to abandon him. But that could still land him in the mid-to-high 30’s and he’d be unelectable in 2012 with those ratings.

Can’t wait to see Barry go out there Friday and say with a straight face the good news about the positive job growth in the private sector. And you know even though I’m being facetious that this is exactly what he’s going to do.

Doughboy on June 30, 2010 at 11:07 AM

..a couple of thoughts:

(1) Pre-weekend media dump.

(2) Friday afternoon tee-time.

..but he’ll have been on it since Day One, which is most likely the crux of the problem.

Who anointed this the “Great Recession”? Seems like an excuse, and a media-driven parallel to FDR. Wouldn’t it be more accurate to call it the Progressive Recession? The irony in that name seems to be more in line with the enigma that is Keynesian economic policy.

If you can beat the skills of any of the fabrication wizards I currently have working for me, come on in, be warned though, my guys are masters.

Or if you don’t mind doing whatever needs to be done you can join the revolving door of sons of my buddies who populate the place. Plus, you will learn how to weld, fabricate, troubleshoot all sorts of stuff you never knew existed, learn how to ride a horse, and get to play Xbox360 at whatever time I feel like calling a break.

That’s about the percent of the population who are living at public expense. They aren’t going to have a problem until the gravy train stops. When it does, things are going to get really ugly really fast.

And most of them are going to blame “greedy” taxpayers for stealing all their free money.

Interesting that so many analysts who were claiming we were going to have a “V” shaped recovery are now discussing a “W” shaped recovery (or double bottom). Most of them are government shills, and none of them could explain the logic of a “jobless” recovery. They are now seeing that because of this administration’s antipathy toward the private sector it’s dead in the water.

Try owning your own business, that will cast some light on the depths and stubborness of this ‘recession’. It’s no wonder private sector jobs aren’t being added, it’s a miracle some of the businesses that might be expected to do the hiring are surviving. Then I read this blurb for a new non-fiction book at the library about who and how the folks were who got rich on the housing boom.Will try to get ahold of it whne it’s back. I’ll bet I can guess at a few of those names.

Interesting that so many analysts who were claiming we were going to have a “V” shaped recovery are now discussing a “W” shaped recovery (or double bottom). Most of them are government shills, and none of them could explain the logic of a “jobless” recovery. They are now seeing that because of this administration’s antipathy toward the private sector it’s dead in the water.

Yep. The pundits are muttering about a “W” shaped recovery unwilling to concede that it might be overly optimistic. We have to change Congress in November and get rid of the fraud camping out in the WH. It’s going to take some legislators with grit to do it after all the damage that’s been done.

Maybe the government ought to start thinking about getting out of the mortgage business….it’s done nothing but add dead weight to an already crippled housing sector. That’s a huge factor in the continuing drift along the bottom we are seeing. Until housing prices can settle naturally and private capital returns to that market, we’re not going to see any real growth.

Maybe the government ought to start thinking about getting out of the mortgage business….it’s done nothing but add dead weight to an already crippled housing sector. That’s a huge factor in the continuing drift along the bottom we are seeing. Until housing prices can settle naturally and private capital returns to that market, we’re not going to see any real growth.

rockmom on June 30, 2010 at 12:12 PM

IT’S THE UNCERTAINTY STUPID!

That would be a great slogan except 3/4 of the brain dead Americans wouldn’t get it.

Prices will settle eventually since no amount of govt intervention can undo the laws of supply and demand. The uncertainty is when. Is it this year, next year or 2020? And until that uncertainty is removed nobody with money to invest will go anywhere near it.

CBS Radio just reported that it was 30000 Private Sector jobs gained in June. Those lying Rat****ers

Amadeus on June 30, 2010 at 11:36 AM

…and yet the real numbers and reality of why our economy is really getting worse will not get to a large part of the electorate.

…..my daughter had a sleep over last night and I was talking with several of the soccer moms about how badly we were lied to concerning the Health Care bill and the huge amount of debt it is adding to our bottom line (reference the recent CBO report)…….to which they all shook their heads in disgust ……but then proceeded to ask me how I could read all of that “depressing” news all of the time.
They said there was just so much that they could handle and chose not to “go there” very much….

…I was stunned and just stated that I don’t like being lied to and need to know the truth of what was going on around me.

…….I know we conservatives are counting on big changes in November……but we are going to have to fight day and night to get even close to the turn over we are hoping for.

These numbers will seem like the good times by the time DOTUS is finished with us.

You see we are Americans (actually European invaders) and we need to have our “CHICKENS COME HOME TO WOOST”. We’ll be thanking our lucky stars if we even have jobs since having a private sector job means you’re consuming, and polluting.

My wife is the same way. Any time I mention anything in the news, she gets mad at me for bringing up things that make me upset. In a way I wish I could live with my head in the sand like that. My blood pressure would be a lot lower, that’s for sure.

Baxter Greene on June 30, 2010 at 12:30 PM
My wife is the same way. Any time I mention anything in the news, she gets mad at me for bringing up things that make me upset. In a way I wish I could live with my head in the sand like that. My blood pressure would be a lot lower, that’s for sure.

angryed on June 30, 2010 at 1:41 PM

Ignorance is bliss but theres’ a solution here, for anyone who says they do not want to hear it,
Here’s what you say,
“I understand you do not like to hear about this and being a man of solutions rather than a complainer here’s what I’ll do:
I will not bring these subjects up to you again if you allow me to fill out, witness your signature and mail your absentee ballott!” (Because Dems and dem voters are filthy liars who cannot be trusted to do whats’ right even if they are wives)

“This does not mean I will not talk to others about this though as I do not want to see Junior and Miss Junior be slaves to the Lyin rats that inhabit D.C. and be forced to pay for lazy lyin rats and union workers their whole lives!”

Or if you don’t mind doing whatever needs to be done you can join the revolving door of sons of my buddies who populate the place. Plus, you will learn how to weld, fabricate, troubleshoot all sorts of stuff you never knew existed, learn how to ride a horse, and get to play Xbox360 at whatever time I feel like calling a break.

Bishop on June 30, 2010 at 11:34 AM

Can’t possibly be any worse than 7 to 7 kitchen drudgework and pushing a mop. Where’s your shop?

Me too. Goldman Sachs foreclosed (company went into receivership) on the company I had worked at for 10 years. The owner of the company (a personal friend of mine) had built the company from the ground up for 30 years and killed himself the day the bank came in to take the company over.

This is a bit lengthy but IMHO important:

A significant part of the company failing was the owners decision to start up a repackaging division to augment the warehousing and distribution business that was profitable for 20 years. The repackaging division required lots of capitol to get started and keep it running but due to mismanagement of the repackaging division it was never making any money. Instead it was sucking the life out of the warehousing and distribution division that were profitable.

The VP/GM of the repackaging division was low-balling quotes for the sake of bringing in business in order to justify his job and the division and it eventually bled the company dry. I still for the life of me cannot understand how the owner of the company could not or would not see what was obvious to most of us that the repackaging division was bleeding out the company and it needed new management or needed to be cut to save the company.

Also, prior to Goldman Sachs (GS) foreclosing on the company it seems to me that they could have conducted a forensic audit of the company’s financials to determine its ability to be profitable. Had they done so it would have quickly become obvious that the repackaging division was the source of the company’s decline but the warehousing and distribution divisions were solid. GS could have provided additional funding with a stipulation that the repackaging division be operated under new management for a year to see if it could be made profitable and after a years time re-evaluate the division and if it’s still not profitable then GS could require the division be liquidated before additional funding would be provided.

Instead GS foreclosed on the company and bit off quite a Shiite Samich, that Shiite Samich being well over a million dollars in hazardous material disposal costs and commercial property not worth what was owed due to the bad commercial real estate market.

Now I’m not normally a conspiracy theory minded person but this situation makes me think that because GS had received bailout money from the feds and GS had the opportunity (as I outlined above) to possibly help the company I worked for get back on its feet thus protecting GS’s considerable investment (loans) to the company GS instead chose to foreclose at a considerable loss therefore I cannot help but think GS has someone else (the feds) pulling the strings with the goal of destroying our economic machine, why else would they pull the plug and take such a huge loss?

Seriously, the scenario I provided above for saving the company is a no-brainer, the fact someone like me with no Bachelors or Masters degree in business administration can come up with the idea and the bean counters at GS couldn’t gives one pause and makes one wonder if GS has a hidden agenda and cards they aren’t showing.

Regardless, as a result 100 more people are out of work, a good man took his own life, and his widow had everything (including her husband of 35 years) taken from her.

I heard on Kudlow that businesses have over $1.5 trillion on hand, but are not spending it on expansion. They are too worried about all the new taxes (capital gains, overseas income, Obamacare, bank tax, etc) and rules to risk it on new commitments to growth. So they are sitting on the sidelines waiting for all the sh-t from DC to blow by and for all the uncertainty to dissipate, for better or worse. Their unwillingness to invest in their own businesses is a big reason why they are not going to hire for some time to come.

O/T – Kudos to you, an entrepreneur. Thanks for creating some real jobs for Americans.

I’m a software engineer who misses the days when I used to do hands-on work in the trades, building tangible things. Now it’s just sitting in a chair tippedee-typedee all day. I miss working with REAL tools.

Teach those college kids the meaning of a good, hard days work. EARNING a paycheck. The work ethic I learned from working with my Dad in the trades has stood me in good stead all these years.